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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 12, No. 3, pp.295-305
ISSN: 1225-0279 (Print)
Print publication date 31 Aug 1999
Received Jan 1998 Revised May 1999

Debt Financing with Limited Liability and Quantity Competition

Krishnendu Ghosh Dastidar
Associate Professor, Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi 110067, INDIA, Tel: +91-11-6107676 (Ext. 2448), Fax: +91-11-6865886 kgd@jnuniv.ernet.in

JEL Classification: L13

Abstract

In this paper we extend some results of Brander and Lewis (1986). In particular, we show that their main theorem, as it is stated, is not true. We provide the correct and extended version of that result and also discuss how this approach can be used to probe into some well known Industrial Organisation results.

Acknowledgments

I am indebted to Anjan Mukherji and Kunal Sengupta for this paper. Comments by two referees of this journal were extremely helpful. Ananya Ghosh Dastidar and Dipankar Sengupta were a great help while I was revising the paper.

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